David Savage, chief revenue officer at Lightfoot, has responded to the Autumn Budget with an acknowledgement of the struggle businesses will have to bear with the introduction of the 3p per mile charge for electric vehicles (EV).
He said: “It could become an administrative burden for businesses, where various costs and taxes are paid by lease companies, the end-user fleet, and drivers.
“Who will manage and pay this? At least there is some time before it is implemented, and hopefully the Government will listen to the fleet industry on this over the next two years.
“We do welcome the fact that pence-per-mile will not apply to commercial vehicles, as the burden would be disproportionate for these fleets: they often have to do the miles they do in order to run a business.
“However, by not applying it to one electric vehicle sector while applying it to another, it highlights how arbitrary the concept is.
“While all vehicles should be taxed fairly, implementing a pay-per-mile scheme for electric and plug-in hybrid cars risks sending the wrong message and inhibiting growth in the sector.
“Many businesses or drivers find the notion of pence-per-mile intrusive, and it will take a lot of education to explain what the effect of 3p-per-mile is for each individual or fleet.
“Clearly, something needs to be done about road tax as the UK vehicle fleet decarbonises, but it seems better to wait until an entirely new system is in place that applies to all vehicles, irrespective of their powertrain.”
Savage also acknowledged the 5p fuel duty cut being retained until September 2026 and said that fleets are paying it anyway, as the gap between wholesale and retail prices of fuel is at a record level.
He added: “The Government has said they will call retailers out on this, and have promised a real time fuel finder for some time, but for time-pressed business fleets, driving around to get the cheapest fuel is not always viable, and actually counter-productive.
“As a result, the only way to mitigate any increases in fuel costs – whether inflationary or discretionary – is to get more miles out of every litre by driving more efficiently.
“It is possible: we see it every day in fleets we work that reductions in fuel consumption of up to 15% can be achieved.
“This means that whatever the actions of retailers or politicians, the power to reduce costs is in fleets’ hands.”
